Investigation on China’s Green Tech Subsidies Intensifies with Focus on Wind Turbine Sector by the EU
The European Union (EU) has launched an investigation into China’s wind turbine sector, marking the latest move in its efforts to protect its member states’ companies from the impact of cheap, clean energy products. The EU’s antitrust commissioner, Margrethe Vestager, emphasized the need for a systemic approach to prevent unfair competition. This probe follows investigations into electric vehicles (EVs), trains, and solar panels.
The investigation into Chinese wind turbine suppliers aims to determine if subsidies provided by the Chinese regime have given them an unfair advantage in the EU market. The European Commission announced this investigation on April 9, highlighting its commitment to ensuring fair market conditions. The EU has previously conducted investigations into potential unfair competition by China, including probes into solar panel companies and a subsidiary of CRRC Corporation Ltd, the Chinese state-owned railway giant.
The EU’s “Foreign Subsidies Regulation,” which came into effect in July last year, requires companies to report if they have received more than €4 million ($4.2 million) in foreign financial subsidies in the last three years when the contract value exceeds €250 million ($265.7 million) in public tenders. This regulation prompted the investigation into Chinese solar panel companies that participated in tenders for solar-powered industrial parks in Romania. The European Commission found sufficient evidence to suggest that these companies had received subsidies from the Chinese regime, distorting market conditions.
China’s dominance in the solar industry has raised concerns within the EU. Less than 3 percent of solar panels installed in the EU are produced in Europe, according to Margrethe Vestager. The EU heavily relies on Chinese photovoltaic products, which has led to the decline of European solar energy companies. Many European companies went bankrupt due to China’s huge capacity and low prices in the solar industry.
The investigations into China’s green tech subsidies are not limited to the EU. The United States is also concerned about overcapacity in China’s clean energy products. Secretary of Treasury Janet Yellen recently addressed this issue during her visit to Beijing, highlighting the threat it poses to manufacturers in the United States and other countries.
A study by the Kiel Institute for the World Economy (KIEL) in Germany supports the concerns raised by the EU and the United States. The study alleges that the Chinese regime heavily subsidizes domestic industries, particularly green technologies like EVs and wind energy. Chinese companies receive direct subsidies, as well as other support measures such as priority access to key raw materials, forced technology transfers, and preferential treatment in public procurement. These subsidies have enabled Chinese companies to rapidly expand their presence in various green technology fields and dominate not only the Chinese market but also the EU market.
While subsidies are common during the early stages of a new industry’s development, they become unfair competition when provided throughout every stage of production, from raw materials to sales and exports. Chinese dissident and scholar Li Hengqing emphasized the need for antitrust laws and anti-unfair competition laws to address this issue.
China’s future agenda involves directing investment into the manufacturing sector to offset the downturn in the real estate sector. Supported by cheap loans and subsidies, Chinese companies are seeking overseas buyers for their surplus goods. However, with the investigations by the EU and the United States intensifying, it is becoming clear that these countries are no longer willing to tolerate China’s unfair practices.
The investigations into China’s green tech subsidies highlight the importance of fair competition in the global market. The EU and the United States are taking a stand against China’s dominance in clean energy products, aiming to protect their own industries and ensure a level playing field for all. As the investigations progress, the outcome will have significant implications for not only the wind turbine sector but also the broader green tech industry and international trade relations.
